Since 2008, an independent look at challenges and opportunities in sports and financial investing, with occasional diversions as my mood takes me. Nothing is for sale, and this not a Profit and Loss report either. They're boring.

Friday, 28 August 2009

From that trustworthy source of news, the Sun, there was this story:Rafa Benitez and Franck Ribery have been dragged innocently into a betting scam worth hundreds of thousands of pounds.

Neither Benitez nor Ribery had anything whatsoever to do with the bets but their names were all that a sophisticated syndicate needed to pull off the coup.

Last week, the odds on Benitez to become the first Premier League manager to lose his job were unexpectedly slashed from 18-1 to just 6-4 in three hours.

One betting firm closed its book on the bet.

Ribery, meanwhile, was backed from 66-1 to 3-1 to join Liverpool from Bayern Munich.

Again, the majority of the bets were placed in a single day and there was absolutely no substance to the story.

Instead, there is grave concern both 'bets' were manufactured by an organised group, who deliberately placed thousands of pounds on Rafa leaving and Ribery moving in order to force the odds to tumble.

Then, with the entire market braced for both events to happen, the syndicate bet even more money on the exact opposite - Rafa to STAY at Liverpool and Ribery to STAY at Bayern!

Analysts are convinced the syndicate bet five times more on Rafa remaining than they originally placed on him going, safe in the knowledge they had made it all up about his departure in the first place.

So, for example, if £10,000 was staked on Benitez going, they then placed another £50,000 that he would not be the first manager sacked.

When another boss is eventually fired, the syndicate will collect £50,000 at even money from bets made mainly on the betting exchange markets.

I can reveal these two instances of manipulation of a market in the last month have raised alarm bells within the gambling industry.

In the case of Benitez, the flurry of money started in Liverpool but subsequently spread across the north west and London.

The initial money is believed to have been staked in a handful of large bets with two firms - placed on the accounts of 'high-roller' clients.

And the people at the centre of it are very much aware of how best to whip up a storm. I am told an anonymous tip-off was made to a Mersey-side radio station, claiming Benitez had stormed out of Liverpool's training complex on Tuesday morning.

With a game against Stoke at Anfield that night, the manager was not even at Melwood.

Yet that fib got the rumour mill in full flow and football websites were soon trumpeting the news of a potential bust-up between club and manager.

Betting firms looked at the money being staked and the gathering speed of the story and adjusted the odds.

Some even had their PR teams putting out press releases, while others appeared on TV to debate the issue.

All of which suggests this is a well-organised, well-funded racket exploiting the expanding interest in gambling.

Sources within the betting industry estimate that between £200-£300k has been placed.

In the case of the Ribery bet, the total amount that was staked was around £12,000. But that was enough to create a market interest, which allowed more than treble that amount to be laid off against him signing for Liverpool.

It is believed Ribery was a trial run ahead of the much bigger plan for the Benitez bet.

Unfortunately, the biggest losers in this sting are the ordinary punters placing bets on Rafa to leave, trusting the sudden drop in odds means something is up at Anfield.

They have no idea the entire market is being manipulated to present a fake picture.

Bookies call it 'the chase', when one big bet on an unexpected outcome rolls into a flurry of smaller ones trying to get on the back of what they think is good information.

All of the major firms and exchanges are aware of the potential for manufactured or manipulated markets and this kind of betting is not illegal.

But at a time when Football League players have been banned and fined for match fixing and sports from cricket to tennis are under scrutiny, how can they ignore the problem?

This is a serious issue and one the industry needs to act upon. I've made my views on these markets known before, and so I don't have too much sympathy for someone who bets on unverified rumours. As the article says, it's not illegal, and it should be a case of caveat emptor as far as I am concerned. Off to Monza for the weekend.

2 comments:

The article is right about them being losers, not only as you said would they have placed bets on a rumour, but most probably did so after the 'scam' event. Meaning they missed the boat but thought that 6/4 was still good value – nothing like getting in at the bottom.

Anyway, why are you going to Monza now? You should wait two weeks for the Italian Grand Prix. My sources tell me the announcements about Schumacher not racing are untrue and following Badoer’s poor performance, Michael will be in the car for Monza. Amazingly you can lay ‘no’ in the ‘will he race for Ferrari’ market for 1.07. What are you waiting for – get you bets on now. That info has to be worth at least £55 doesn’t it?

The real concern I have with something like this is, how can anyone stop it happening? How can exchanges or bookmakers identify when someone is trying to force the price down or just having a large punt?

About Me

I have had a life-long interest in sports and after studying Pure Mathematics with Statistics at secondary school, have been fascinated by odds and probability.
The first system I came up with was a simple one - back the favourite and double up after a loss until a winner. Simple enough in theory, and I told my Dad about it. Not being a betting man himself, he ran it by some of his colleagues, and came home to tell me that it wouldn’t work because a long losing run would mean that the bank would be empty. Then there was always the possibility that the winner would be returned at odds-on, meaning that the total returns would not match the outlay. Not what a ten year old wants to hear! Only slightly daunted, I then went on a search for the Holy Grail, the secret to riches that I knew was out there somewhere. Finally in 2004 I stumbled across an article about Betting Exchanges and four years on I am able to make a steady profit. I am at that age where I can start thinking about retirement and anything I make from trading sports will bring that day forward.